Discuss Some of the Arguments Made Against Globalization and Explain Why You Agree or Disagree with Them.

Topics: World Bank, World Trade Organization, International Monetary Fund Pages: 5 (1731 words) Published: November 18, 2011
Globalization is the interaction of world economies to become one big economy, for the sole purpose of enhancing free trade, growth and efficiency and employment. It emphasizes the neo-liberal economic policies – commonly referred to as the ‘Washington Consensus’ – of free trade, financial and capital market liberalization, deregulation and privatization (Juhasz, pg 408). The supporters of globalization argue that it is essential to an individual’s advancement and economic progress, and constantly reiterate that an integrated market economy will bring prosperity worldwide. Whereas, critics of globalization believe that without a proper framework and policies, the consequence of globalization will have a great impact on world politics, income inequality and environment (social services). In this paper, I will highlight the adverse affects and flaws of globalization policies that aim at promoting the notion of one unified economy. The focus will be on the critical analysis of the instruments and areas of globalization; that proponents continue to use to support their argument. The term ‘globalization’ came into prominence among academics in the 1980s (Marks et al., pg 616). World Bank and International Monetary Fund (IMF) were the main proponents of globalization and enforced this economic model globally after their establishment in 1944. It was the combined efforts of Regan and Thatcher’s governments that increased the scope of these institutions and laid the foundation of North American Free Trade Agreement (NAFTA) in 1994 and World Trade Organization (WTO) in 1995. The establishment of these bodies increased the power of globalization agreements and ensured the embodiment of these policies into domestic policy making both in developed and developing countries (Juhasz, pg 408). Theoretically it is assumed that globalization will increase wealth, which will trickle down and lead to the betterment of the rest of the society. However, this is an ideal situation confined to books, in reality the wealth does not actually trickle down instead it remains at the top, removing development tools from government and communities and increasing inequality and poverty globally. Structural Adjustment Programs (SAPs) are designed to allow the economies of developing countries to become market oriented and divert their attention to increasing trade and production. The conditions imposed through this program such as privatization, deregulation and removal of trade barriers leads to the concentration of wealth in few hands. Economic growth has decreased or increased at a slower rate, under liberal policies. Many developing countries have been badly impacted in contrast to developed nations. For example, sub-Saharan Africa has exports reaching nearly 30% of GDP (compared with just 19% for most wealthy countries), but the number of people living in poverty has continued to grow while economic growth has declined (Juhasz, pg 419). Critics mainly attribute this to a changing trend where people are forced away from their traditional livelihoods and production. They are forced to produce for exports, comprising of high-end luxury items rather than local consumption. These high-end items usually consist of beef, shrimp, cotton and coffee. Furthermore, as most developing nations are restricted through SAP under World Bank and IMF, they are competing for the same markets and revenues globally. This leads to interdependence on global markets creating fluctuations in their economies, due to fierce competition and market forces of demand and supply. More fully integrated can also create instability, as economic shocks are more quickly transmitted throughout global markets (Marks et al., pg 617). The change in production trend does not only impact economic growth, but as research shows it has elevated hunger. Increase in Brazilian Soybean exports to feed European livestock, hunger increased rapidly within the country. Policies under SAP have denied...
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